Patrick O'Donovan (Limerick, Fine Gael)
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174. To ask the Minister for Finance the tax implications in a case were the child of a farmer under the Young Farmer Top-Up Scheme receives entitlements by transfer from the parent; and if he will make a statement on the matter. [14769/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised that the Young Farmers scheme is part of the Basic Payments Scheme introduced in 2015 under the new measures agreed in the reform of the Common Agricultural Policy. The Basic Payment Scheme has replaced the Single Payment Scheme and payments under the scheme are liable to Income Tax. The Young Farmers Scheme also provides for an additional payment to any person who commences farming or takes over existing holdings. It is available for a maximum period of 5 years depending on the year of commencement of farming.

The correct tax treatment of transfers between a parent and child can only be determined by reference to the specific terms and conditions agreed between the parties. In the absence of this information it is not possible to give a definitive answer. However, in general, where for example a parent permits a herd number to be held in joint names with a son or daughter this will be treated as a disposal by a parent of his or her entitlements under the Basic Payments Scheme. These entitlements under the Basic Payments Scheme are a chargeable asset for Capital Gains Tax purposes. Accordingly, any chargeable gain arising on the disposal of such entitlements is ordinarily liable to Capital Gains Tax. The first €1,270 of any gain is exempt from Capital Gains Tax. Where the gain exceeds that amount, Capital Gains Tax will only be charged on the amount in excess of €1,270. The current rate of Capital Gains Tax is 33%. There may also be a Gift Tax implication arising on the transfer but there is tax free threshold of €225,000 available on transfers between a parent and son or daughter. In addition, there is an annual €3,000 exemption and should any Capital Gains Tax be payable on the transfer, the Capital Gains Tax paid is available as a credit against any Gift Tax liability arising as both the Capital Gains Tax and Gift Tax liabilities arise on the same event.

Patrick O'Donovan (Limerick, Fine Gael)
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175. To ask the Minister for Finance the tax implications for a farmer and one of that farmer's children creating a partnership; and if he will make a statement on the matter. [14770/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that this is a very broad question, the answer to which would depend upon a number of factors. This being so it is not possible to give a detailed answer to the question without knowing the specifics of the case involved.

The Revenue Commissioners have advised me that the implications for a farmer and one of his or her children entering into a partnership, presumably to jointly carry on the trade of farming would be no different to the implications for any two other people entering into a partnership for the purposes of carrying on any trade or profession.One of the issues which all partners in a farming partnerships need to consider is whether or not the partnership qualifies for, and whether or not they wish the partnership to be, a 'registered farm partnership'  which can avail of increased stock relief.

Detailed guidance on registered farm partnerships is available on the Teagasc website at: